Tuesday, 7 July 2020

Sorry Network Homes, land seizure is not the solution to the lack of land supply


Well I guess it's a start that some people involved in housing are talking about land.
Land is becoming an ever-bigger barrier to new supply. Land makes up over 70% of the value of existing homes (up from 50% in 1995) and is a high input cost when building a new home.9 As the cost of construction varies relatively little across the country, when we talk about unaffordable market homes, in many ways we are discussing the high cost of land in some areas. This is at the heart of the housing crisis.
So we find asserted at the start of a report by Reuben Young and Kayleigh Pearse for Netwrok Homes. It really shouldn't come as a surprise to make this discovery or to see, as the authors do, that the operation of our land market is central to resolving the problems within our housing markets. The authors also recognise that land value is not evenly distributed because there are "...fewer homes in high demand areas than there are households who want to live in high demand areas..."

The demand for housing land is still determined largely by the market - land in Bradford city centre has low, even negative, value whereas land in suburban London and exurban Surrey is eye-wateringly expensive. Supply of the land, however, is not determined by the market but by the planning system. So it's curious that the authors, while acknowledging the impact of planning ("...large swathes of greenfield land around cities are politically determined undevelopable, and planning permissions everywhere are rationed by a political approval process...") then choose a solution that ignores supply constraints.
Allow local councils, Homes England, and the Greater London Authority to compulsorily purchase land at existing use value. This would be instead of the much higher ‘hope value’. This will let public bodies cheaply assemble land for housing which would be challenging for the private sector to do because of fragmented ownership or other difficulties. It would also deter speculation on land, because landowners would know that their land could be bought without consideration for making a future profit. The result would be more homes, and cheaper land for everyone.
It all sounds lovely doesn't it? The greedy landowner doesn't make huge gains from that "hope value" and benign local councils reap the benefit. Of course those public bodies would have to seize the land (let's describe compulsory purchase properly) in order to build the homes. Now, leaving aside the potential for all sorts of essentially corrupt political shenanigans, the whole process still requires that same local council to make housing land allocations through its local plan. Our authors glibly state that all this will give a "...greater incentive for landowners to bring forward land at lower values..." - essentially local councils wave a big stick at landowners with threats of seizure. Again the potential for political games and even corruption is legion but the fundamental problem - policy constraints on land supply - remains in place.

There is no need for these land seizure proposals. If you want to reduce the value of housing development land then the way to do it is to make more of it available, to resolve the problem with those "..large swathes of greenfield land..." in places where demand for housing is high. The proposal here simply dodges this problem - there's still the political issue of where housing goes regardless of whether or not you give the local council powers to seize the land. We are back to cramming more (affordable) houses onto land that doesn't have much value because its not where people want to live but is where it's politically possible to allow the houses to be built.

The resolution of the land price problem doesn't come by artificially making the land expensive then artificially making it cheap again, the resolution lies in taking from politicians the power to decide which land is or isn't available for development. And that power sits with the planning system not the market for land.

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Monday, 6 July 2020

Quote of the Day: Back to the Pub

The Fleece, Cullingworth - a Proper Pub
From the Old Curmudgeon:
Many so-called beer enthusiasts who may in the past have given lip service to supporting pubs seem to have gleefully joined in with both of these tendencies. They may well have found they quite enjoyed staying at home during lockdown enjoying supplies of draft craft beer takeouts from their local micro bar, absolved of any need to actually go out and visit any pubs and mix with the dreaded hoi polloi.
So true, so true. There is an overlap between the beer enthusiast and the pub fan but it's an overlap that exists because pubs sell beer not because the sort of person who buys sample trays or overhopped IPAs in thirds, and take all night drinking them actually likes the pub. The Proper Pub (as Old Mudgie calls them) doesn't sell beer like this and doesn't think that it its business. No, the Proper Pub sells beer in straight pint glasses - as beer writer Pete Brown put it:
"I realise the importance of the pint glass itself. It's the perfect vessel, the ideal amount. You know that there is enough for you to take a long, indulgent pull to clear the dust and cobwebs from the back of your throat and cool you down, and still have a satisfying amount left to savour more slowly after this initial greedy rush."
This comes at the end of Brown's book where, having talked about all sorts of beer, he sits down with a pint of lager. Not special, not expensive, just a pint of lager.

And this, as Old Mudgie describes, is the problem: a certain sort of person sees a middle-aged, working class bloke sitting at a fake wood table in a brightly lit boozer and instantly turn into a raging snob.

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Sunday, 5 July 2020

Is the Green Belt racist?


Over half of Britain's 'black and minority ethnic' (BAME) people live in London (excluding small change 55% in 2011 and probably near 60% today). Add in BAME communities in the Home Counties - Luton, Slough, Gravesend, etc. - and it's likely that nearly seven in ten of such folk live within a commuter journey of central London. This isn't to ignore large BAME communities elsewhere (I live in Bradford, how could I) but rather to ask a question about housing. A question prompted by these tweets from Labour MP, Karen Buck:
In the context of the often febrile debate about 'black lives matter', we can see here the case for there being issues with racism in housing. Mind you the 58% figure is, as I've noted above, in line with the proportion of Londoners from BAME backgrounds, but this doesn't detract from the understandable response that black people are getting a raw housing deal. We remember the Grenfell Tower horror and, in doing so, saw once again that many - perhaps most - of those affected were from BAME communities.

Some, in the manner of David Lammy or Doreen Lawrence, see a specific and identifiable structural racism in these statistics, arguing that the conditions and response would be different had the people concerned been white. It is always worth asking these questions since direct racism of this sort is not a sort of woke myth but it is also worth looking more deeply into the reasons for London's housing crisis. I'm sure Lammy, Buck and other Labour MPs representing inner London constituencies are keen to see their residents, and especially the BAME residents, better and more safely housed.

For some while there has been something of a debate about the reasons why, to nick yet again Jimmy McMillan's catch phrase, the rent's too damned high. Some point to structural changes within the housing mix itself (right-to-buy, private rented properties, lack of rental controls, speculative foreign investment, financialisation) as the main reason for this problem while others point to planning controls (urban containment, green belt, onerous infrastructure requirements).

Recently, as evidence from around the world becomes clearer, the case against urban containment gets stronger:
One literature review lists more than 25 studies over a period of 30 years, all of which indicate a potential for association between stringent land-use regulation and higher house prices (Quigley and Rosenthal 2005). The extent to which house price increases are associated with land use regulation varies. Research has associated as much as 90 percent of average overall house price increases with prescriptive land use regulation (Eicher 2008b), with house price differentials of up to 54 percent and new house price differentials of up to 61 percent (Downs 1992)
Time and time again - even from those like economists at the Bank of England who were sceptical of planning system derived reasons for housing unaffordability - the existence of restrictions on land supply to prevent 'sprawl' are noted as the dominant driver of that unaffordability. Which brings us back to what we can (perhaps) call structural racism - if the majority of BAME people live in places negatively affected by perverse incentives within the planning system (like London) then we can argue the system is racist. Or, if you don't favour that Lammy-style analysis (and I'm not sure I do), then you can say that the housing problems for BAME people in London are in large part consequential on decades of failure to build new houses rather than some sort of racist conspiracy against them.

There are a lot of things you can do to make black lives better (improving schools, less racist policing, a more sane approach to illegal drugs, prison reform, less exploitative political and community leadership) but one of the very best things you can do for those lives is to reform the planning system so BAME people can live - plus lots of others who aren't BAME too - in places where they'd like to live rather than seeming perpetually condemned to the cramped, gardenless, unhealthy life of the dense inner city. The Green Belt may not actually be racist but reforming it would be one of the very best things you could do to improve black lives in Britain.

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Friday, 3 July 2020

Lockdown Living - in which the Resolution Foundation discover (and then ignore) London's housing crisis

 The Resolution Foundation has published some work looking at what they call "Lockdown Living", essentially a brief review of housing conditions in the UK:
We show that living conditions in lockdown have been determined by long-term housing trends such as tenure change, the failure to build sufficient social-housing stock and weak regulation of the private-rented sector. As we face the prospect of local lockdowns or even a second wave going into the winter months, both short- and long-term action to address the inequalities uncovered here is needed more than ever before.
What the Resolution Foundation find shouldn't come as a surprise to anyone with more than the passing appreciation of housing issues in the UK. We're told that poorer people live in less good, more overcrowded conditions and that older people tend to have more living space than younger people. Unsurprisingly, given the age and social profile of BAME communities - younger, poorer - these groups are more likely to be in poor homes (Resolution Foundation use damp as their test here) and more likely to be overcrowded.

The report makes few recommendations (suggesting, for example, that opening playgrounds, libraries and leisure centre especially in more deprived areas would ease pressures from lockdown) but points to several problems within our system such as changing tenures and how this impacts on health and well-being. The authors, however, remain stuck with the belief that the resolution to housing issues such as those they describe lie in more regulation and more state-controlled housing provision. At no point to they try to understand how it is that the well-being of owner occupiers is so much better than that of renters (both social and private sector).

It is notable too that no attmept is made by the authors to understand geographical factors in their findings. We read that BAME people are more likely to live in overcrowded conditions, less likely to have a garden, and more likely to live in a damp home. Clearly a concern but the Resolution Foundation should also have noted that 55% of the UK's BAME population lives in London which also has much higher levels of private renting, high rise living and poor quality social housing.

Similarly, having noted how over 55s have much more living space, the authors don't then also recognise that this is what might be called an "empty nest" effect brought about by young people leaving home for work or study rather than a direct consequence of intergenerational housing inequality. There's also a geographical issue here since London has a much younger age profile than the rest of the UK and further that the Resolution Foundation's use of unadjusted income skews the findings since average London incomes are much higher than much of the rest of the UK.

It's good that this work is done although the Resolution Foundation could be a lot less 'glass half empty' in its presentation. The problem, however, is simply not a function of PRS regulation or the lack of funding for social housing for all that some changes here would be desirable. The problem is London. Every single measure that the report uses reflects the crisis within London's housing - overcrowding reflects a (social and private) rental market dominated by flats, damp homes the overwhelming of environmental health enforcement by the sheer numbers of private rented properties, and the loss of wellbeing by the fact that 'thirtysomethings' in London stay renting because they can't afford to buy.

It's almost certainly the case that the young and less well-off have, in terms of day-to-day living, suffered worse under lockdown - the "lockdown is lovely" crowd were mostly well-heeled retirees outside London with nice homes and gardens in smart market towns not stressed immigrant families in a London high-rise or young professionals trying to work from home on a wobbly IKEA desk in the corner of a bedroom. But stripped of the emotive messaging, what we see from the report is further evidence that London does not begin to meet the housing needs of many of its residents and that the only way to meet these needs is to build more family housing. Enough that, over time, we can get back to the conditions of those 'thirtysomethings' parents and have family homes affordable to people on average pay.

Spending lots of money on new social housing (which is unlikely to be family housing in London) or badgering government into new rent regulations might seem like a good idea but, in reality, it's using an inadequate sticking plaster to cover over the damage done by the lack of housing land supply in the South East and London. Without the wholesale reform of our strategic planning system to free up five- or ten-times more land for housing, the problems found by the Resolution Foundation will persist.

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Wednesday, 1 July 2020

Build, build, build (just not in our back yard, obviously)

Create Streets

Build, build, build was the cry. Another one of those incontrovertible three word slogans beloved of political copyriters:
Boris Johnson has announced the most radical reforms to our planning system since the Second World War, making it easier to build better homes where people want to live.
Such exciting times. After all, where people want to live is easy to discover - look at Zoopla or Right Move and track those places with the highest house prices. All those lovely, clean, safe Home Counties market towns, the Cotswold villages nestling in that glorious countryside, spa towns like Harrogate and Bath. These are the places where people "want to live" and planning reform will take away the barriers to people being able to do just that - hallelujah!

Then, in what passes for detail, we see the truth, "build, build, build" isn't about houses in places people want to live, it's about cramming more houses into places where people don't want to live. The "most radical planning reforms since the Second World War" amount to just four things, none of which add anything to development land supply let alone housing land in the home counties or rural Wessex:

1. Changing use classes so you can switch from being a shop to a cafe without needing planning permission (with a long list of exclusions obviously)

2. Extending 'permitted development' rights to more commercial and industrial buildings allowing them to be turned into housing (adding to the office-resi rights that are helping create a new generation of high rise slums)

3. Allowing commecial propery to be demolished for housing without needing planning permission (which is fine but you do wonder where the commercial premises will be when every business park in Surrey is housing)

4. Letting us build an extra storey on our house so long as the neighbours don't object

We're promised, in addition, a pile of government cash to "free up brownfield sites", "to deliver affordable homes" and to cover up the reality that when it boils down to it the rent's too damned high. Plus a 'policy paper' on further unspecified planning reform (it was going to be a White Paper, then a Green Paper, now a Policy Paper - next week it'll be a consultation).

This is, to put it mildly, rather underwhelming - even the £12 billion for affordable homes only gets us 180,000 (say the government - at current build costs I make it 100-120,000 but there you go) new houses. A whole load of sound and fury accompanied with frissons of PR joy from the think tanks and housing organisations that stand to benefit from some of this government largess.

We aren't getting meaningful planning reform because (read the Tweets and press releases of Conservtive MPs, regional mayors and council leaders) to do so means facing up to the barriers that this system presents. For the MPs it's a simple matter, they can march their local residents up to the top of the hill crying "save the green belt" knowing that, when the housing gets approved, it won't be their fault. A moment's thought and honesty from those MPs and they'd have told residents that we need the housing, the land is allocated for houses and that's what you'll get.

You can't reform planning because there are 150 Tory MPs who will oppose any reform that threatens the precious green belt (the same goes for all the other parties by the way this isn't just a Tory fixation). And any planning reform intended to deliver "better homes where people want to live" has to put an end to at least some of the urban constraint that the green belt represents.

So "build, build, build" will spend a lot of money, will tinker with the rules so it looks like "radical reform", and will oil the wheels of a planning and housing system that doesn't work. Young people in London, Bristol, Bath and Brighton still won't be able to buy a nice home with a garden like their parents and grandparents. Worse, their employer now expects them to work half time from home when that means balancing a lap top and some paperwork on a cheap IKEA side table shoved in the corner of a bedroom in a shared flat.

In a recent survey over half of working age residents of California's Bay Area said they were thinking about leaving the area (probably the world's least affordable housing market). Without meaningful planning reform this is where London is headed. If build, build, build means 'OK build some houses but over there on that crappy industrial site not near me' then it's not planning reform and we'll still have a housing crisis when the cash pot's empty.

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Monday, 29 June 2020

Quote of the Day: California, Death of the Dream -

Welcome to California
California. Woke central, progressive California:
"The statistics for poverty, driven by high costs and diminished opportunities, are shocking. California suffers the highest poverty rate, adjusted for costs, of any state in the country, according to the U.S. Census. A recent United Way study found that close to one in three families in the state are barely able to pay their bills. Fully one in three welfare recipients in the nation live in the California, although it is home to barely 12 percent of the country’s population. Today eight million Californians live in poverty, including two million children, by far the most of any state...

...Hispanics and African Americans do worse in California than al­most anywhere else in the country. Based on cost-of-living estimates from the Census Bureau, 28 percent of African Americans in the state live in poverty, compared with 22 percent nationally. Fully one-third of Latinos, now the state’s largest ethnic group, live in poverty, compared with 21 percent outside the state. Over half of all Latino households can barely pay their bills, according to a United Way study—a figure which rises to 80 percent for undocumented Latinos. “For Latinos,” notes long-time political consultant Mike Madrid, “the California Dream is becoming an unattainable fantasy."
This is a state dominated by the progressive left. Yet by any measure it's doing worse that places like Texas and Tennessee run by folk those progressives consider to be dumb racist hicks . Having all the right pronouns doesn't get anyone a better job, a decent education or a house they can afford.



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Orcs are the baddies and fantasy games need baddies



You know where you are with orcs. Slaveringly ugly, utterly evil and just the thing to test to edge of your human paladin's blade or the power of your elf sorcerer's fireball. If you're stuck for some monsters to pad out your dungeon slap in a few orcs, sprinkle on a goblin or two and have them ordered around by an ogre.

The original 1977 Advanced Dungeons and Dragons Monster Manual has this to say about orcs:
"Being bullies, the stronger will always intimidate and dominate the weaker. Orcs dwell in places where sunlight is dim or non-existant, for they hate the light..."
It goes on...
"Orcs are cruel and hate living thing in general, but they particularly hate elves and will always attack them in preference to other creatures. They take slaves for work, food and entertainment (torture, etc.), but not elves whom they kill immediately."
Pretty clear, orcs are the baddies.

It seems, however, that these simple days are over as the plague of woke-ness spills into the world of fantasy role-playing games:
The publisher of Dungeons & Dragons (D&D) says it will adjust the way it portrays some of its “evil” races, such as the “savage” orcs and the “depraved” dark elves, as part of a broader push against racism in the wake of George Floyd‘s death.
For a long while our world of fantasy gaming (and the wider world of fantasy literature) was largely immune to the 'everything is racist' tendency in the wider world. Occasional flares erupted when some English literature professor chasing a headline would say something like "Tolkien “created the blueprint for the troubling relationship between race and fantasy that would govern twentieth-century fantasies.” Now it seems we have to take the bizarre idea that orcs aren't essentially evil and lump it into our games, not because having a lawful good orc paladin is a cool idea, but because some people who don't play the game have decided that the orc is some sort of racist sterotype.

All this - outside infuences pushed onto the game - reminds me of the campaigns by Christian groups to get D&D banned because it normalised witchcaft and satanism. The assumption from the woke puritans (in taking up the battle from their Chrsitian puritan predecessors) is that the presence of 'races' with different characteristics somehow twists the minds of the people, especially young people obviously, playing the game. After three hours slashing, bashing and fireballing we come out worse people because we played a game with different 'races' - I toured a dungeon a week or so back with a man-sized turtle and what amounted to a tin man not sure what to make of that.

Later this week I'll be taking a half-orc paladin on a continuing quest to kill some drow (dark elves that live in a hierarchical society that happens to be a matriarchy) - quite how this sets me on the 'drow and orcs are a negative racial stereotype' continuum I'm not sure. What's clear to me from playing the game is that most players walk round the stereotypes because that makes the role play more engaging. For sure the orc tribe in the mountains are baddies but you might do better negotiating with them to stop the slave raids or the pillage rather than taking the old-fashioned route of extermination.

People outside the game seem not to appreciate its flexibility and the scope to play all the foibles of human psychology. If folk want a woke version - "orcx" as one wag on Twitter put it - there is nothing to stop you doing so right now. If what you want to do is make the game completely different because you (a political activist who doesn't play the game or a literature professor looking for career brownie points) dislike its central concept of 'races', then don't be upset if those of us who play the game - and have done so for over 40 years without turning into fascists - tell you politely to take a running jump.

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